Government updates grant programmes for the agricultural sector, aligning them closer to EU rules

The Cabinet of Ministers of Ukraine has updated the mechanisms for providing grants for the development of horticulture, berry growing, viticulture, greenhouse farming, as well as the construction of vegetable and fruit storage facilities. The relevant amendments to Resolution No. 738 of 21 June 2022 were approved on 22 April.

The changes are intended to make state support for businesses more effective and the use of funds more transparent, while bringing the grant programmes closer to EU rules under the Ukraine Facility.

The document introduces a number of innovations, including:

• Mandatory verification of grant recipients in accordance with the requirements of the Framework Agreement between Ukraine and the EU;
• An obligation for grant recipients to inform the public about the source of funding using the EU emblem and the marking “Funded by the European Union – Ukraine Facility”;
• A ban on granting funds to entities subject to EU sanctions.

At the same time, opportunities for agricultural producers have been expanded. In particular, a tiered system for storage capacity has been introduced, which opens up access to funding for small farms. The list of regions suitable for almond cultivation has also been expanded.

Grants will be provided exclusively for the new construction of vegetable and fruit storage facilities on land plots. The minimum capacity of the facilities is 500 tonnes of simultaneous storage. The maximum grant amount is up to UAH 20 million and depends on capacity:

• From 500 tonnes – up to UAH 4 million
• From 1,500 tonnes – up to UAH 7 million
• From 3,000 tonnes – up to UAH 10 million
• From 6,000 tonnes – up to UAH 20 million

There are also requirements for job creation: for storage facilities with a capacity of 500 tonnes – at least 6 permanent employees; from 1,500 tonnes – at least 8; over 3,000 tonnes – at least 12; and over 6,000 tonnes – at least 16 employees.

The directions for the use of grants have been clarified and control over expenditure strengthened: mandatory expert examination of the project cost estimates has been introduced, along with additional oversight of the cost of equipment and materials.

It is expected that these changes will increase the transparency and accountability of the grant programmes, prevent access to funding for persons under sanctions, and strengthen control over the use of public resources.

In addition, the updated support mechanisms will stimulate the development of agro-processing, the creation of new enterprises and jobs, and contribute to the economic growth of the regions.

“We are systematically improving the grant programmes so that they comply with European rules and at the same time work as effectively as possible for the development of the Ukrainian agricultural sector. This concerns both access to financing and the creation of added value, the development of agro-processing, and the strengthening of the overall resilience of the economy,” noted Taras Vysotskyi, Deputy Minister of Economy, Environment and Agriculture.

Overall, the proposed changes make state support more targeted and accessible to small and medium-sized producers, while maintaining the principles of co-financing and efficient use of budget funds. At the same time, they will promote the development of modern storage infrastructure, reduce post-harvest losses, improve the quality and competitiveness of agricultural products, and create new permanent jobs in the regions.